Localization: Window Dressing or Real Change?

MSD Hub editor's note (Michael Field, Senior Systems Specialist, Vikāra Institute):

The blog provides a very good overview of the localization debate during MSS2024.  While the debate covered a lot of ground, there were two important takeaways. The first is that MSD remains overly focused on the project as the central change agent. More specifically, a lot of the conversation focused on how a project brings local actors into the project’s contexts, as opposed to how a project operates as a temporary catalyst that supports and influences localized change processes. The second takeaway aligns with a growing movement to update facilitation guidance. Many practitioners highlighted that the shift toward MSD projects supporting and guiding local actors as they lead local change processes requires new and revised facilitation guidance. For example, the idea of project partnering with a local actor to achieve project-defined goals does not align with emerging good practice around finding and amplifying attractors. While the dismantling of USAID and the general devaluing of international development investments are highly concerning, the disruption does provide an opportunity to fully embrace a systems-thinking understanding of localization. 

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A provocative debate from the 2024 Market Systems Symposium reveals uncomfortable truths about implementation, power and the future of international development.

The conference room in Cape Town was full of seasoned development practitioners, energized by what they had learned and experienced during the first day of the 2024 7th Global Market Systems Symposium. It was now the second day, and I was about to facilitate the plenary debate about whether localization was just window dressing or real change. 

The plenary debate has been a central component of the MSS since 2018. Each year, the participants debate a new topic. In 2024, the MSS organizers made a decision that paid off handsomely by putting the spotlight on the question of localization in international development – a question that has become increasingly urgent, driven by donor commitments, practitioner experiences, and a growing recognition that traditional approaches are not delivering sustainable and scalable transformations. This urgency created the conditions for an intense, passionate and rich debate.

After welcoming the participants, I proceeded with my opening arguments about why I believed that localization was just a window dressing exercise. What followed was one of the most intense, passionate and nuanced debates I have ever witnessed.

By the end, the binary question of whether localization is "good" or "bad" had evolved into something far more sophisticated: a deep exploration of the conditions under which localization works and doesn’t, why it can work, and why it is important to keep the conversation alive. (Spoiler alert: the conversation will continue at the MSS 2025 in Durban, South Africa, from 28-30 October!)

1. The Opening: Localization is Just Window Dressing

My opening critique was intentionally harsh: "Localization hampers systemic thinking because it narrows down our field of vision," I argued. "Understanding localization from the perspective of communities in a specific geographic space hampers our ability to see beyond them. Most of the causes of poverty, marginalization and vulnerability are not within the communities themselves, but outside.

“This geographic framing creates artificial boundaries that prevent us from understanding interconnected systems where root causes and solutions often span multiple scales and locations. A value chain analysis, for instance, typically reveals that many critical actors operate far beyond what we might consider the ‘local community’.”

I went deeper, questioning the very foundations of current localization practice:

"Localization is a technocratic and bureaucratic exercise focused on improving coordination between donors and local partners. Building the capacity of the latter is a great idea, but not so much when it is aimed at achieving the objectives of the donors and channeling more funds directly to local partners. The whole exercise is focused and dependent on the so-called local partners.

“But what is a local partner? Is it an organization that was created by people who were born in that specific country? Is it an organization whose board of directors is constituted by people from communities? Is it an organization that was registered in that country? Is it an organization that represents communities legitimately?"

“Surely, this definitional ambiguity”, I argued, “creates opportunities for gaming the system rather than genuine empowerment.”

I wasn’t done yet, and I could already feel the tension rising. I had two more questions:

“Are we creating perverse incentives? The push for localization creates incentives for international NGOs to establish national subsidiaries specifically to capture funding streams, potentially crowding out genuinely grassroots initiatives. Furthermore, pressure to include local partners for compliance purposes increases coordination costs while donors simultaneously demand efficiency and value for money.

“Do power imbalances persist regardless of organizational arrangements? Let's face it," I concluded, "this inequality in power dynamics is based on the power that comes from money and knowledge. Knowledge that is Western, that is scientific, that is 'professional'. And even if we wanted to minimize this imbalance, decades of direct delivery have created the idea in local actors that we are more powerful and knowledgeable than them."

It did not take long for a participant to emphatically challenge my arguments: “I feel very passionate about this subject. Not only because localization means different things to different people, but because as systems thinkers, a lot of our systems are local. And even though there are system actors and power structures that are outside the local system, we never really address those power dynamics. As implementing partners, our job as systems thinkers is to engage local entities to get sustainability and ownership at the local level. I have seen great transformations in the way we do our business in the last 20 years.”

Her argument was based on practical experience: Genuine transformation requires local ownership and institutional strength. “Regardless of the definition and the systems aspect we use, the local institutions that are getting strengthened through the activities we undertake will be able to get ownership and lead the development effort at the local level. I don't think it happens in four or eight years, but it does happen.”

This exchange revealed a fundamental tension: The mismatch between the extended timeframes required for genuine institutional development and the shorter cycles typical of donor-funded programs.

But it also prompted me to reiterate what for me is a crucial question: "What is local?" After a couple of seconds of silence, I ventured an answer: "From a systems perspective, 'local' is whatever makes things happen sustainably and at scale. Are we equating 'local' with 'community' or are we equating 'local' with 'system'?"

2. The Messy Reality of Implementation

As practitioners shared their experiences, the complexity of localization in practice became clear.

The Humanitarian-Development Divide

One participant from South Sudan highlighted how localization has been driven primarily by humanitarian rather than sustainable development actors, creating coordination challenges:

"One of the things we know is that the drivers of the localization agenda have been coming mainly from the humanitarian side of the development space. But one thing that we acknowledged [during a previous plenary session] is the need for dialogue between the humanitarian and the development agencies."

I could see people nodding. His message resonated with a sort of primordial understanding that humanitarians are experts on what happens on the ground, whilst sustainable development practitioners operate mainly at the meso and macro levels.  Regardless of the validity of this understanding, I could feel the energy rising around the need to stop this fragmentation between the two sides.  

Are We Really Committed to Getting Out?

He also raised critical questions about ownership transfer timelines and investment requirements:

"How long would it take for us to transition out? For example, if you're working with a local partner and you want them to take up some of the activities you are doing, how long would this take and how much would it cost? To what extent are donors really behaving as facilitators, and are we willing to invest in the transition that is required for local ownership to happen? We talk about shifting resources from international development agencies to local agencies. But localization should make us ask ourselves: How do we work with local structures to increase their capacity to drive change?”

The Localization vs. Locally Led Development Distinction

A participant from the USA made a crucial distinction that would frame much of the subsequent discussion: "I think it's important whenever we get into any of these discussions, to distinguish between what some people call 'localization' and other people call 'locally led development'. These two things are very different."

Localization, he argued, is "essentially procurement related. A procurement initiative to push more direct funding to organizations based outside the US and Europe." Locally led development, by contrast, "is not necessarily part of any procurement initiative per se, but simply local actors in their own context managing and leading initiatives, irrespective of whether those initiatives are funded by international donors."

This distinction cuts to the heart of many practitioners' frustrations: are we talking about changing who receives contracts, or changing who makes decisions about priorities and approaches?

A Labor of Love: What Genuine Localization Looks Like

Another participant provided an example from Senegal that illustrated both the potential and the challenges of genuine localization. Working with farmer cooperatives and a global IT company that allows people to create applications for frontline staff, her team developed a mobile application that tracked growing seasons and linked farmers to extension agents. But they didn't stop there…

"We wanted to hand over the app to local IT firms," she explained. "To do this, we had to work with [the global IT company] to develop an application that the local IT firms could run and manage. We also had to tailor our M&E data to meet the needs of the farmers and be relevant to their decision-making. This process was incredibly labor- and time-intensive. I would call it a labor of love. I think our role as facilitators should really be this process of accompaniment."

The example revealed the intensive investment required for genuine handover and the importance of building new relationships between different types of local actors rather than simply transferring specific capabilities to the target groups.

The Two Hats Dilemma

A participant from Haiti described the complex position of local practitioners caught between local priorities and donor requirements: "When we are executing projects in those communities, I always say that I wear two hats. The first one is a Haitian hat. That means it doesn't matter if donors are pushing for indicators... If it doesn't make sense for the country, it's not going to be pushed."

But he also highlighted a fundamental problem with the entire debate: "We are here talking about localization, and the real partners —the local actors, are not here. So, if I can talk for them, it's already a problem."

His comments remind us of the importance of alignment of interests and objectives between donors, government and communities, and making sure that the voices of communities inform the localization process. Perhaps localization could inform and improve the impacts of budget support programs…

The Donors’ Institutional Context: Trapped Against Their Will?

And, talking about budget support, another participant had a couple of relevant ideas: "I think localization and local development are issues that are coming back, like for example, when I started in 2003, we used to have the Paris Declaration. Basically, developing countries were telling donors: 'You should channel all your resources through our systems'."

But he also highlighted the limitations of technical approaches: "We must recognize that there's another system that is geopolitical, and we don't fully influence certain things like localization because they respond to other dynamics that we can't necessarily grapple with."

His ideas reiterate the importance of understanding the systems at play when localization is being planned and implemented. Specifically, the institutional system in which donors are embedded, which ultimately influences their priorities and decisions in ways that sometimes make them seem disconnected from local realities.

3. The Uncomfortable Truths About Power

As the discussion deepened, participants began exploring uncomfortable realities about power relationships in development practice.

The Leverage Nobody Talks About

One participant offered a provocative perspective: "When we think about localization and power dynamics between development partners and local institutions, we don't pay much attention to the fact that local entities wield tremendous power of influence by the notion that it gives development partners an opportunity to exist... The truth is if we don't give them the opportunity to roll out these initiatives, then there's no purpose for development partners."

The Missing Voices

A participant from Kenya raised critical questions about who's involved in localization conversations: "When we talk about localization, how come we have not had conversations about the government? The responsibilities and the work that we are doing have to be taken up by the government."

She also questioned the depth of community engagement: "What is the role of community engagement in our activities? Because most of the time when you hear conversations on this stage, we hear 'we', but who are we? When are we shifting power? Who owns the agenda?"

Partnership-Driven Localization: Shifting Power Dynamics

A participant from Liberia shared how they are working to create more balanced power dynamics amongst stakeholders by going "beyond the traditional conception of localization... It's basically about empowering local leaders who can take senior leadership in our organizations and across other organizations.

"Some of the things we're beginning to do in Liberia, for example, is we have bids for which we're forming consortia with local institutions, local private sector actors, local civil society organizations, as core partners in our consortium to bid for programs, not as people that will give sub awards."

The Risk of Creating Local Elites

A participant from Kenya outlined a risk that we sometimes ignore or prefer to ignore: "Localization, as far as giving money to local organizations, poses several risks that donors need to be aware of and mitigate against. A very important one is the risk of creating or strengthening local elites. For instance, in Kenya we've seen food aid to help a certain region, and that food, or even seeds and inputs are distributed to cronies, friends of politicians."

The Knowledge Leadership Problem

This participant also highlighted another crucial issue: "What is the ability of local institutions to lead and be thought leaders? Oftentimes, we say that the knowledge sits with them, but we're the ones who have the learning systems and the capacity to harvest that knowledge from them and write beautiful publications. And so, we're the ones known as the thought leaders." This observation pointed to fundamental though seldom discussed aspects of power in development: Who drives the knowledge systems and who gets recognized as the source of knowledge and innovation?

The Economies of Scale Challenge: When “Small” is Not So Beautiful

I proposed that practical constraints limit how ‘local’ certain interventions can be: "There are some businesses and sectors that are not financially viable if they are too small. Most businesses that are sustainable at a relatively large scale operate beyond what we see as ‘local’. They could be national or international businesses."

"The hard truth," I added, "is that donors must also disburse a given volume of resources. And the management and coordination costs of splitting those disbursements into very small amounts that are appropriate for local actors can be too expensive and is not seen as high value for money for taxpayers."

Who Really Makes Decisions?

The participant who challenged me at the beginning brought us full circle, cutting to the heart of the matter: "To answer the question of whether localization is window dressing or real change, we must ask ourselves if localization results in locally led development. The reason I'm saying this is because programmatic decisions are made at the donors' offices. To be honest with you, none of us [implementers] really makes any decisions. So, if this is the case, does it matter whether the program is implemented by an international organization or a local organization? It's administrative management of those funds."

This observation revealed a central tension: If fundamental decisions about priorities, approaches, and success metrics remain with donors, does changing who implements programs actually matter?

4. The Plot Twist: Recognizing Progress

Near the end, I revealed the true intention of my extreme opening arguments against localization: "I cannot finish this debate without saying that I lied to you at the beginning because, after all, I'm not so negative about localization. I did what I did because I wanted to promote a debate."

I recognized the donors’ efforts to improve localization approaches. I highlighted specific examples of promising practices from a leading donor (see 14 Good Practices on page 12 of this Localization Report). For instance: Co-creating awards with local or regional partners; making descriptive, not prescriptive awards to local partners; using demand-driven capacity strengthening approaches; conducting listening tours to inform activity design; and co-creating with local stakeholders, including communities.

Some donors are also asking us to diversify our partner base to include more private enterprises. They are basically saying that they don't want this localization to be only for or driven by local NGOs. This creates opportunities for us to work with donors to empower and engage local businesses, and make sure that the principles and practices of MSD make it into a bigger arena, reach more people, more donors and makes development practice better and more sustainable and more scalable. (See for example, page 27 of this Private Sector Engagement Policy).

5. Key Insights

The debate's ultimate contribution was moving beyond simplistic pro- or anti-localization positions toward a more nuanced understanding. Several key insights emerged:

Context matters. The effectiveness of localization depends heavily on specific contexts, implementation approaches, and the definitions of "local" and "development" being used. Particularly interesting is the insight about the need to understand the institutional contexts in which decision-makers within national governments and donor agencies operate, including the incentives, procedures and pressures that shape their behaviour.

Think spectrum, not destination. Localization exists on a continuum rather than as a binary state, with different aspects (funding, decision-making, implementation, knowledge creation) potentially localized to different degrees. Linked to this is also the idea that localization will never be perfect and will always be open-ended. For localization to manifest, the actors in the system must constantly nurture it. 

Power dynamics require explicit attention. Unaddressed power imbalances can undermine localization efforts regardless of organizational arrangements or funding flows. Two specific aspects to keep in mind are: (i) The capacity of marginalized communities to understand and influence the localization process; and (ii) the power that stems from the production, management and communication of knowledge.

Time horizons matter. Genuine localization requires extended time commitments that may not align with typical donor funding cycles. Therefore, both donors and implementing agencies must improve their institutional procedures to engage in a patient and loving dance with the systems they want to strengthen, while listening carefully to and flowing with their rhythms.

Systems thinking and localization are complementary. Localization and systems thinking can work together, but this requires careful attention to the system’s boundaries, structures, dynamics and the stakeholders’ perspectives. Localization that produces real change cannot be achieved without a systems mindset.

As you can see, the debate in Cape Town didn't provide a definitive answer to the original question. No… it actually achieved something much better: It reminded us that localization is neither inherently beneficial nor problematic, but rather the result of practices that require careful attention to implementation, power dynamics and contexts. It also revealed its nuances, potential and challenges, and allowed participants to share examples of how they are trying to realize the full potential of localization.

The path forward lies in developing more sophisticated approaches that can navigate the tensions and trade-offs involved in supporting locally led development while working within the realities of international development institutions.

The question is no longer whether to localize, but how to do so in ways that serve local priorities while building sustainable local capabilities, and in collaboration with relevant actors, including those that could be otherwise be labelled as external. It is this nuanced understanding that offers the best hope for development practice that is both effective and genuinely responsive to local needs and priorities.

Author:

Luis E. Osorio-Cortes (Lucho), International Development Specialist